Car insurance prices shift up a gear

The cost of comprehensive car insurance has risen for the first time in more than three years, according to the latest Confused.com Car Insurance Price Index in association with Towers Watson.

The average quoted premium for an annual comprehensive car insurance policy now stands at £582, rising from £579 in Q2 2014. Although this is just a marginal quarterly increase of £3 (0.4%), this is the first time premiums have increased since June 2011.

However, whilst prices have crept up this quarter, overall comprehensive car insurance premiums are still down year-on-year. This time last year (Q3 2013) motorists were facing car insurance premiums of £652, whereas a year on (Q3 2014) prices are 10.7% lower (-£70).

With the cost of car insurance falling consistently over the last three years, motorists across the board have been enjoying lower premiums. However, predictions of unsustainable ongoing price decreases now appear to be coming into fruition, with motorists across a range of different demographics experiencing some upward movement in prices this quarter.

Both men and women have seen quarterly price rises, albeit minimal, of £1 and £4 respectively. However, some age groups and geographical pockets have been hit harder than others, experiencing more significant price rises.

Motorists aged 19 have been subject to a quarterly price rise of £56 (+3.7%), with 20-year-olds experiencing a similar increase of £41 (+3.0%). And it’s not just younger motorists being subjected to rising premiums – motorists aged 66 have experienced the greatest price increase of any age group, seeing their premiums rise by 6.1% quarter-on-quarter.

Top 10 Quarterly Price Increases by Age

Age

Q-on-Q % increase

Q-on-Q % increase in Q3

2014 Price

66

6.1%

£19

£324

19

3.7%

£56

£1,571

20

3.0%

£41

£1,412

69

2.9%

£9

£331

32

2.8%

£15

£558

70

2.6%

£8

£333

58

2.4%

£9

£391

34

2.2%

£11

£498

33

1.9%

£10

£525

71+

1.9%

£6

£348

And when it comes to regional price increases, motorists in the South have drawn the short straw, seeing their insurance premiums increase by 2.6% (+£12) compared to last quarter – the highest increase of any region in the UK.

Whilst the South as a whole has experienced price rises, some cities in the region have seen larger increases than others. Drivers in Southampton have seen their policies increase quarter-on-quarter by 4.0% - an increase of £18, with motorists in nearby Portsmouth experiencing price rises of 3.4% - an increase of £15. Brighton and Bournemouth motorists have also seen marginal increases of 1.4% and 1.3% respectively quarter-on-quarter – an increase of £6 on their policy.

However, it’s not bad news for all motorists this quarter, with some continuing to experience substantial decreases in their premiums. Those particularly benefiting this quarter are 17-year-old motorists, who have experienced the greatest quarterly decrease of any age group of -4.3%, seeing their premiums fall by £86 since Q2 2014.

This means that the average comprehensive premium for a 17-year-old currently stands at £1,911 – the lowest ever price recorded for this age group since the Index began, and £792 cheaper than this time last year (Q3 2013). What’s more, when compared to insurance premiums for 17-year-olds during price peaks in Q3 2011, these drivers have seen their premiums almost halve in price, dropping a staggering 48.8% from £3,729 to £1,911.

Some regions are also continuing to benefit from falling premiums, with motorists in Northern Ireland experiencing the biggest quarter-on-quarter price drops of -2.2%, with premiums in this region falling by £15 since Q2 2014, to now stand at £667. Prices in this region are also down 11.8% year-on-year, with premiums this time last year coming in at £755 - £89 higher.

Steve Sanders, Finance Director at Confused.com says:

“The decreases in car insurance premiums that we’ve been experiencing for the last three years have been welcome news for motorists, however over recent months the heat has certainly come out of these price reductions.

“Our latest figures suggest that these price drops are now levelling out, with premiums actually rising over the last quarter to now stand at £582. Although this is just a marginal quarterly increase of £3, this is the first time premiums have increased since June 2011.

“While many motorists have experienced an upward movement in premiums, some have been more extensive than others, with some young drivers in particular (19-year-olds) seeing rises of up to £56 over the quarter.

“However, whilst prices have crept up this quarter, overall comprehensive car insurance premiums are still down year-on-year by 11%. These annual price drops are being felt most by our youngest drivers, with 17-year-olds currently enjoying the lowest ever price for their insurance since the Index began (£1,911) - a staggering £792 cheaper than this time last year.

“Overall, it’s been a mixed bag over the last quarter, with price movements affecting consumers in different ways. These latest quarterly price movements are likely to fuel further speculation that the insurance pricing cycle may turn in the near future. With prices shifting around either way, as they have been over the last quarter, we’re urging consumers to shop around and compare prices using Confused.com to ensure they get the best deal possible.”

- ENDS -

Notes to Editors:

More than 4 million quotes are used in the construction of each quarter’s insurance price index - this makes it the most comprehensive insurance index in the UK. Unless otherwise stated all prices referred to are for comprehensive cover.

The following web pages will be updated to reflect the new figures and can be linked to: http://www.confused.com/car-insurance/price-index
Media information:

About the Index:
The index is compiled using anonymous data from all enquiries submitted on Confused.com. In line with the draft Office of Fair Trading (OFT) commitments on the use of competitor price data, the prices used for calculating the index are based on an average of the best five quotes received on Confused.com.

About Towers Watson:
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. The company offers solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at www.towerswatson.com

About Confused.com

Launched in 2002, Confused.com was the UK's first price comparison site for car insurance and is one of the UK’s biggest and most popular price comparison services, generating over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include small van insurance, motorcycle insurance, car buying and selling, and car finance, as well as a number of tools designed to save drivers money on motoring.

Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.

Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the Financial Conduct Authority.

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